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Bulls awoke reinvigorated as risk markets have come roaring back to life following their brutal weekend selloff!
What’s the scoop?
- Tripping Circuits: Japan’s S&P 500 equivalent, the Nikkei 225, experienced amplified effects from the rally in comparison to global stocks due to simultaneous yen weakening; its futures index rallied 15% off the bottom and tripped upside circuit breakers that halted trading just prior to the Tuesday open for Japanese cash markets after an 8% move.
- No Fear: Volatility cuts both ways and has favored the bulls since the open of U.S. stock markets on Monday morning. Although the majority of crypto assets have yet to entirely retrace their dumps like many stocks, majors BTC and ETH respectively pumped a monstrous 15% and 20% off yesterday’s lows.
Bankless Take:
Enhanced volatility to both the upside and downside typically occurs in market sell offs due to uncertainty about the future trajectory of asset prices.
Last week’s concerns that America’s Federal Reserve cannot cut interest rates without crushing carry traders of all forms still exist today, and as elated as bulls may be with a momentary respite from the indiscriminate selling, additional gains beyond today will be required to support the notion that this is anything more significant than a dead cat bounce.
Here it is:
— Mac10 (@SuburbanDrone) August 6, 2024
Three times the Tech sector made its low BELOW the 200 day moving average. Three times volume spiked. Three times capitulation in the options market.
This time, Tech is backtesting the 200 day, volume record high, and no capitulation.
System test is on deck. pic.twitter.com/c4GWLJXhPJ
